Minnesota Health Care Financing Task Force Seamless Coverage

Minnesota Health Care Financing Task Force Seamless Coverage

Minnesota Health Care Financing Task Force Seamless Coverage Workgroup NOVEMBER 6, 2015 S T. PA U L , M N The presentation will be posted when accessibility standards are completed. In the meantime, if you desire a copy of the presentation, please contact [email protected] Task Force Vision and Goals Vision: Sustainable, quality health care for all Minnesotans Guiding Principles Realistic: The task force will make recommendations that can realistically be implemented. High Value Impact: The task force will seek recommendations that have high value and are meaningful to Minnesotas health care reform efforts. Holistic Perspective: The task force understands that health care finance and our recommendations do not exist in a vacuum, and are components of the health care and population health systems. Focus: The task force recognizes that health care financing and system reform is extremely complex and it will contribute to the broader policy debates by focusing its time and attention on the issues it is charged with addressing. Innovation: The task force is encouraged to identify opportunities for innovation in Minnesotas health care financing and delivery systems which show promise for lowering costs, improving

population health and improving the patient experience. Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 2 Agenda Time 10:15 10:45 am Item Joint Workgroup Meeting Path to Final Recommendations Welcome & Review of Agenda Premium Stability Conclude 10/30 discussion Presenter/Facilitator 11:20 am 12:45 pm Discuss Options & Considerations for Financing a Sustainable & Seamless Coverage Continuum Manatt

12:45 12:55 pm 12:55 1:00 pm Public Comment Wrap Up & Next Steps Lynn Blewett Lynn Blewett 10:45 10:50 am 10:50 11:20 am Manatt Lynn Blewett Manatt Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 3 Minnesota Health Care Financing Task Force Seamless Coverage & Barriers To Access Workgroups J O I N T S E S S I O N O N PAT H T O F I N A L R E C O M M E N D AT I O N S NOVEMBER 6, 2015

The presentation will be posted when accessibility standards are completed. In the meantime, if you desire a copy of the presentation, please contact [email protected] Path to Final Recommendations Running List of recommendations to be shared at each Task Force meeting as attachment to the meeting agenda and record (see Attachment) Manatt to revise workplans/timeline to reflect plan for remaining meetings to drive to final recommendations 11/13 Milliman modeling 12/4 to 12/18 Draft recommendations report 12/18 Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf

Contact: [email protected] 5 Approach to the Final Recommendations/Report Executive summary-like format to maximize impact and ease of use. No surprises the Draft Report will reflect Task Force deliberations and discussion. Report will acknowledge the other options and considerations that were discussed, even if such options are ultimately not reflected as part of the recommendations. If necessary, report can also reflect a dissenting point of view or opinion. Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected]

6 Approving the Final Report Task Force members will vote to approve the report A vote to approve means a Member: Agrees with most of the recommendations Affirms that the process for determining recommendations was inclusive and balanced Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 7 Minnesota Health Care Financing Task Force Seamless Coverage Workgroup P R E M I U M S TA B I L I T Y NOVEMBER 6, 2015 The presentation will be posted when

accessibility standards are completed. In the meantime, if you desire a copy of the presentation, please contact [email protected] Introduction Goal of Market Stability Strategies Importance of Market Stability Ensure affordable health insurance and avoid large rate increases Predictable rates enhance consumer confidence and minimize enrollment losses due to unaffordable rate increases Some stabilization strategies also slow rate of medical inflation by reducing underlying costs of care Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 9 Recap of Commerce Proposals to Increase

Premium Stability Create Minnesota-specific price stability mechanisms (e.g., reinsurance) Merge individual and small group markets Closer scrutiny of insurer profits Cost transparency Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 10 State-Specific Price Stability Mechanism Considerations Pros:

Spreads the costs of expensive enrollees Reduces volatility in claims experience for insurers which may reduce premium Can have bigger premium impact if financing comes from revenue sources beyond only insurers in the individual market Cons: Requires financing Significant implementation questions Complex to administer May be less helpful as volatility declines Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 11 Merging Markets Considerations Pros:

Larger pool helps stabilize premiums Reduces disruption in cases where small employer eliminates group plan and employees move to individual market Cons: Creates winners and losers to extent there are premium differences between markets Requires detailed data analysis to assess impact Simplifies regulatory oversight Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 12 Limits on Reserves: Considerations Pros: Cons:

MLR ensures that premium dollars go to cover medical costs May constrain insurer investment in longer term cost saving measures Surplus regulation levels playing field (large surplus creates market advantages, including predatory pricing) Could impact solvency if too aggressive Ensures excess premium revenue is returned to consumers Significant implementation questions Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected]

13 Increase Transparency in Rate-Setting What is it? Make the rate filing and rate review process more transparent and open to public input ACA Requirements: ACA requires public disclosure and actuarial justification when insurers propose rate increases above 10% States have widely varying rate review practices but general trend is toward expanded transparency and more public input into the process Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 14 Increasing Transparency Considerations Pros: Enhances public accountability by allowing public scrutiny of rate filings Increases public understanding of factors impacting rates

Cons: May affect competitive dynamics in the marketplace May create upward pressure on requested rates Facilitates comparative analysis of insurer rate filings Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 15 Discussion Questions Are there short-term stabilization initiatives that the Task Force should move forward? Are there longer-term stabilizations that the Task Force should suggest be studied further? Next Steps

Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 16 Minnesota Health Care Financing Task Force Seamless Coverage Workgroup F I N A N C I N G A S U S TA I N A B L E & S E A M L E S S C O V E R A G E CONTINUUM NOVEMBER 6, 2015 The presentation will be posted when accessibility standards are completed. In the meantime, if you desire a copy of the presentation, please contact [email protected] Approach to Developing Financing Recommendations Todays conversation focuses on: Developing recommendations for how to fund Minnesotas public programs and Marketplace Not how much it will cost

Milliman modeling will address costs of options, including savings due to delivery system and payment reform Not what the cost will cover, in terms of program features Seamless workgroup will make separate but related recommendations around program features and consolidation Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 18 Framework for Developing Financing Recommendations Goal: Develop recommendations related to sustainable funding of the Minnesota coverage continuum Maximize federal dollars Create predictability from year-to-year for legislators, providers and consumers Stabilize the portion of the States budget dedicated to funding the coverage continuum Other? Financing public programs (focusing on supporting affordability for populations with incomes from 138% - 200% FPL) and financing the Marketplace are two distinct issues to be addressed Health Care Financing Task Force

Information: www.mn.gov/dhs/hcftf Contact: [email protected] 19 Key Questions Public Programs What additional federal funds might be available to reduce the States portion of Minnesotas affordability scale? Should Minnesota continue to have a provider assessment to fund the States portion of Minnesotas affordability scale > 138% FPL? Should Minnesota continue dedicate funding through its Health Care Access Fund (based on revenue from provider assessments) to fund the State of Minnesotas affordability scale > 138% FPL Marketplace: Should Minnesota expand the user fee to include on- and offMarketplace products? Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 20 Agenda: Financing Public Programs Financing Public Programs

Financing the Marketplace Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 21 Summary of Current Funding Enrollee Premium Contributions Federal Funds State Funds (Source) (Source) 58% 42% (average) (average)

Medicaid Match General Fund & Health Care Access Fund 0% MinnesotaCare* 2015: 49% 2016: Analysis in process 2015: 48% 2016: Analysis in process 2015: 3% MinnesotaCare* APTC/CSRs through BHP Health Care Access Fund Program Medical Assistance

Medical Assistance 0% 2016: Analysis in process *Funding for MinnesotaCare can change on annual basis. Factors driving the state versus federal share include the overall cost of the program (based on states negotiated capitation rate paid to MCOs) and the QHP benchmark rate (based on the approved premium rates by Commerce). Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] Source: Health Care Access Fund Statement, End of Session 2015 22 Overview of Funding Options to Support Affordability for Populations > 138% FPL Federal Funding APTCs/CSRs* State Funding Provider assessments/Health Care Access Fund*

Medicaid match (in addition to APTCs/CSRs) General fund Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] * Current funding sources 23 Federal Funding Options >138%: APTCs/CSRs Minnesota can leverage APTC/CSRs through one of three mechanisms: Basic Health Program. State receives 95% of the value of the APTCs/CSRs that would have been available through the Marketplace (current federal funding source) 1332 Waiver. State receives 100% of the value of the APTCs/CSRs that would have been available through the Marketplace. (Note: Waivers are not available until 2017 and funding formula has not been announced.) Marketplace. Consumers receive 100% of the value of APTC/CSRs when they enroll in silver-level plans in the Marketplace. Milliman modeling will inform recommendations regarding the coverage program mechanism for populations above 138% FPL Health Care Financing Task Force

Information: www.mn.gov/dhs/hcftf Contact: [email protected] 24 Future Federal Funding Options: Medicaid Match for Populations > 138% MN previously covered this population using a Medicaid match under an 1115 waiver. In 2015, MN converted people with incomes between 138-200% FPL to the Basic Health Program. Today, MinnesotaCare receives no Medicaid dollars for this population. State could consider submitting an 1115 waiver to draw down a Medicaid match to supplement federal ATPC/CSR funding for people with incomes >138% FPL. Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 25 Medicaid Match for Populations > 138% FPL: State Examples Other states have used 1115 waivers to receive a Medicaid match to improve coverage affordability for populations > 138% FPL, while continuing to access APTC/CSR dollars Vermont

Additional subsidy for Marketplace premiums Individuals with incomes up to 300% FPL Effective January 1, 2014 Massachusetts Additional subsidy for Marketplace premiums Individuals with incomes up to 300% FPL Effective January 1, 2014 Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 26 Medicaid Match for Populations > 138% FPL Pros: Cons: Brings additional federal dollars into State, reducing States fiscal

obligations Requires CMS approval of 1115 waiver through a discretionary process; new administration may have a different view on waivers Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 27 Overview of Future Funding Options: Public Programs Federal Funding APTC/CSRs* Medicaid match (for additional funding) State Funding Provider assessments/ Health Care Access Fund* General fund Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf

Contact: [email protected] * Current funding sources 28 Future State Funding Options: Provider Assessments Overview CMS Provider Assessment Definition: A health care-related fee, assessment or mandatory payment for which at least 85% of the burden of the assessment falls on health care providers.* All states, except Alaska, have provider assessments. Nursing homes, hospitals and ICFs are the most common providers that are subject to an assessment. Enacting provider taxes, as a practical matter, requires agreement of the providers being taxed. Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] * 42 C.F.R. 433.55. 29 Future State Funding Options: Provider Assessments Rules In order to receive federal Medicaid matching funds for

provider assessment revenue, the assessment must: be broad-based be imposed uniformly not exceed 25% of the non-federal share of Medicaid costs not hold providers harmless Tax rates of <6% generally meet the hold harmless test. Constraints do not apply to BHP or 1332 funding Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 30 Health Plans+ Hospitals+ Percentage of State Share Funded with Provider Assessment Revenue^ Nursing Homes+ Future State Funding Options:

Provider Assessment Examples $1,091,681,218 $139,712,997 12.80% x x x - - Colorado $2,289,072,342 $587,401,602 25.70% x

x x - - Maryland $3,634,166,238 $717,307,156 19.70% x x x x - Minnesota

$4,568,231,916 $795,059,666 17.40% x x x x x Oklahoma $1,558,015,278 $190,006,111 12.20% x x

x - - Wisconsin $2,586,229,227 $527,086,836 20.40% x x x - x Other+ Arkansas

Provider Assessment Revenue^ ICFs+ State State Share of Medicaid Expenditures* ^ ^FY 2012 +Provider Assessments (2014) Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] Source: GAO, Medicaid Financing: Questionnaire Data on States' Methods for Financing Medicaid Payments from 2008 through 2012 (GAO-15-227SP, March 2015), an E-supplement to GAO-14-627. Minnesota figures include HCAF revenue and the state share of MinnesotaCare expenditures: http://www.house.leg.state.mn.us/comm/docs/HCAFNovember2012Statement.pdf 31 Health Care Access Fund Sources

2% Tax on gross revenues of providers, hospitals, surgical centers, and wholesale drug distributors 1% Tax on gross premiums of HMOs, nonprofit health service plan corporations, and community integrated service networks MinnesotaCare premiums Federal match on administrative costs Investment income Transfers in from other funds Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 32 Health Care Access Fund Tax Revenue 1% HMO Gross Premiums Tax 2% Provider Tax

700 $ in millions 600 500 400 300 200 100 0 2004*2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Fiscal Year *During the first half of FY 2014: (1) there was no 1% HMO gross premiums tax; (2) the provider tax rate was only 1.5%; and (3) state health programs were exempt from the provider tax. Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 33 Health Care Access Fund Uses 2500 96 173

in millions 2000 72 171 1500 1040 1000 2 96 154 529 397 500 839 883 FY 2016-17 FY 2018-19

556 0 FY 2014-15 Other Transfers Provider and Premium Tax Expansion Transfers Medical Assistance Minnesota Care Agency Direct Appropriations Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 34 Health Care Access Fund Long Term Outlook (Based on November 2013 Forecast*) *This chart is included to illustrate the long term solvency of the fund. Forecast and legislative changes have improved the solvency of the fund from 2015-2019 and made other adjustments ,such as the movement of the federal portion of the BHP to the federal fund. Health Care Financing Task Force

Information: www.mn.gov/dhs/hcftf Contact: [email protected] Future State Funding Options: Provider Assessments Pros: Cons: Longstanding history of provider assessments and surcharges Largest provider assessment (i.e., provider tax) scheduled to expire in 2019 Draws funding from entities most likely to benefit from expanded access to coverage Politically challenging to authorize new assessments Revenue collected on these assessments may be dedicated to health care spending

Subject to CMS constraints (if used to draw federal Medicaid dollars) Revenue may be placed in general fund and not dedicated to health care spending Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 36 Future State Funding Options: General Fund Overview States may use general fund revenue to cover the non-federal share of public program expenditures The state share of Medical Assistance in the current budget is $10.3 billion during the FY2016-17 biennium. About 91% of the state share is funded out of the General Fund and 9% is funded out of the Health Care Access Fund (HCAF) The HCAF provides the remaining $938 million of the state share of MA Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 37 Future State Funding Options:

General Fund Pros: May be allocated to any program Does not require federal approval Cons: Politically challenging to allocate more funding to health care programs/State Health and Human Services Budget General fund availability may vary considerably from year to year Available funding competes with other important State needs outside of HHS budget Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 38 Developing Recommendations for Financing Public Programs: Modeling Needs Path forward requires modeling to identify projected: Total costs of insurance affordability programs (based on

recommendations for coverage options and affordability scale) Likely availability of federal funds Revenue from state sources, including and excluding provider assessments, dedicated to the state share of insurance affordability programs Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 39 Agenda: Financing the Marketplace Financing Public Programs Financing the Marketplace Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 40 Overview of Current Funding:

MNsure, cont. Additional details in appendix * Also referred to as Premium Withhold Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] Source: MNsure 41 Marketplace Sustainability Federal law requires that Exchanges are self-sustaining (42 C.F.R. 155.160) Self-sustaining means funded without federal dollars States can determine their sustainability plans, funding their marketplaces from the following sources:

User fees/premium withholds State general funds Cost allocation to other state agencies Any other revenue source selected by the State Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 42 Overview of Future Financing Options: Marketplace *Options for Consideration Maintain Public Program Cost Allocation Maintain user fee only on onMarketplace products*

Expand user fee to onand offMarketplace products* SBM or Partially Privatized Marketplace Federal user fee FFM or SSBM Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 43 Future Marketplace Financing Options: Maintain Cost Allocation Model Cost allocation will be a core piece of the Marketplace sustainability (unless Minnesota elects to transition to an FFM model) MNsure is the States single application and eligibility determination portal for most populations in Minnesota coverage programs including Medicaid, CHIP, MinnesotaCare and QHPs in the Marketplace Like all states with integrated application, eligibility and enrollment systems, Minnesota allocates a portion of Marketplace costs to DHS (because MNsure is serving public program eligible consumers) Minnesota refined its cost allocation methodology in 2014 to capture

MNsure E&E costs and consumer support costs attributable to public programs. Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 44 Future Marketplace Financing Options: Cost Allocation Model Other State Examples Share of Marketplace Costs State Medicaid Marketplace Kentucky 75% 25% Maryland 86% 14%

Minnesota 70% 30% New York 70% 30% Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] Source for KY, MD, NY data: State Health Reform Assistance Network, Medicaid, Marketplace, and Insurance Inter-agency Relationships, Sept. 24, 2015. 45 Future Marketplace Financing Options: User Fee Only On-Marketplace Products Option: Maintain user fee on on-Marketplace products only MNsure User Fee Revenue Projections Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf

Contact: [email protected] 46 Future Marketplace Financing Options: Maintain User Fee on On-Marketplace Products Only Pros: Does not require any changes Cons: Creates incentives for insurers to favor coverage sold off-MNsure Depending on enrollment, funding may not be sufficient to cover costs Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 47 Future Marketplace Financing Options: Expand User Fee Option: Expand user fee to on- and off-Marketplace products Minnesota currently assesses a user fee only on plans offered

through the Marketplace. Many other states with SBMs, including Kentucky, New York, Connecticut, assess plans inside and outside the Marketplace. Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 48 Future Marketplace Financing Options: Expand User Fee, continued On- and OffMarketplace - 3.5% $13.95 PMPM 1.4% plus $1.25 PMPM broad-based fee 1.35% 1% 2% 1.5% 1%

2% 2.5% 3.5% $13 PMPM New Mexico On-Marketplace Only - Assessment pegged to insurer market share and SBM operating expenses New York Oregon Rhode Island Vermont Washington

N/A N/A - State FFM California Colorado Connecticut DC Hawaii Idaho Kentucky Maryland Massachusetts Minnesota Nevada 2015 User Fee Varies by region $9.66 PMPM

N/A State Appropriations Health Care Financing Task Force 2% plus $4.19 PMPM Information: www.mn.gov/dhs/hcftf Contact: [email protected] *Source: Commonwealth Fund http://www.commonwealthfund.org/publications/blog/2015/may/state-marketplaces-and-financing-stability 49 Future Marketplace Financing Options: Expand User Fee, part 3 Pros: Reduces incentives for insurers to favor off-Marketplace coverage Spreads cost to broader base of those that benefit from higher coverage levels Cons: Some may resist mid-course change Federal system only applies to onMarketplace products Broadening base may enable State to reduce user fee rate Increases flexibility in funding MNsure

Stabilizes resources to fund MNsure Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 50 Federal User Fee If Minnesota converts Marketplace to SSBM or FFM, the federal government will charge for all plans sold through HealthCare.gov FFM Federal government collects 3.5% user fee on all plans sold through HealthCare.gov to cover all Marketplace functions SSBM State may collect user fee Federal government will charge ~2.8%* for all plans sold through

HealthCare.gov for E&E functions State keeps remainder 0.7% of on-Marketplace premiums may not be sufficient to fund States retained Marketplace functions Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] * 2.8% is an estimate. The final rate will be proposed in the 2017 Payment Notice. 51 User Fee in SSBM Model (Low) On-Marketplace Only On- and OffMarketplace Enrollment

50,000 100,000 330,000 (50,000 on Marketplace) (100,000 on Marketplace) Est. Avg. Monthly Premium $318.15 $318.15 $318.15 $318.15 FFM Fee as Upper Limit 3.5% 3.5%

3.5% 3.5% Annual Fee for Federal IT $ 5.34 M $ 10.69 M $ 5.34 M $ 10.69 M Annual Budget for State $ 1.34 M* $ 2.67 M* $ 38.75 M^ $ 33.41 M ^ Total

$ 6.68 M $ 13.36 M $ 44.10 M $ 44.10 M On-Marketplace Only Value (High) (Low) On- and OffMarketplace (High) 330,000 (80% of on-Marketplace) (Remainder) *May not be sufficient to fund remaining State functions, including consumer assistance (e.g., contact center, navigators, marketing, outreach, etc.) and

MNsure staff Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf ^[email protected] be more funding than Contact: needed. User fee could be lowered. 52 Future Marketplace Financing Options: Federal User Fee Pros: Established feature of using HealthCare.gov Cons: State has no control over level of federal user fee Creates disincentive to offer coverage on the Marketplace (FFM only) State may have little revenue remaining to fund consumer assistance programs (SSBM

only) Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 53 Developing Recommendations for Financing the Marketplace: Modeling Needs Path forward requires modeling to identify: Projected costs of Marketplace under various Marketplace models Potential revenue from varying level of user fees on Marketplace products only and on broader insurance market Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 54 Thank you! Patti Boozang [email protected] 212.790.4523 Alice Lam

[email protected] 212.790.4583 Joel Ario [email protected] 518.431.6719 Anne Karl [email protected] 212.790.4578 Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 55 Appendix Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] Current Financing of Medical Assistance Medical Assistance Funding Sources FY2017 The current projected cost of the

County Funds; 1.30% Medical Assistance program in FY2017 is about $12.5 billion State Funds; 41.07% Federal Medicaid Funds (FMAP); 57.63% About 41% of FY2017 program costs are funded by the State, 58% by the federal government, and 1% from counties Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 57 Current Financing of Medical Assistance, continued Medical Assistance (Medicaid) is jointly funded by the state and federal government

States must use non-federal dollars to draw down the federal Medicaid matching funds Federal Medical Assistance Percentage (FMAP) determines the federal governments share Minnesotas FMAP is 50% Under the ACA, states expanding Medicaid receive enhanced FMAP for certain populations For childless adults between 0-133% FPL, MN receives 100% FMAP from 20142016, falling to 90% in 2020 and beyond. Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 58

Current Financing of MinnesotaCare MinnesotaCare Funding Enrollee Premiums; 6.22% State Funding; 49.49% Federal BHP Funding; 44.28% In FY 2017, MinnesotaCare program expenditures are expected to reach $782 million For FY 2017, about 50% of program costs are funded by the state (via Health Care Access Fund), 44% by the federal government, and 6% from enrollee premiums FY 2017 numbers will change, due to a likely increase in federal funding available

because of changes in QHP benchmark premium Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 59 Summary of Current Health Care Taxes and Surcharges Health Care Access Fund 2% Provide TaxScheduled to sunset December 31, 2019 1% HMO Premium Tax Medical Assistance Surcharges (General Fund Revenue) 1.56% Hospital Surcharge .6% HMO Surcharge $2,815/licensed bed Nursing Home Surcharge $3,979/licensed bed ICF/DD Surcharge

These surcharges are deposited into the General Fund and are general purpose funds Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 60 Health Care Access Fund Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] Source: Health Care Access Fund Statement, End of Session 2015 61 Overview of Current Funding: MNsure 1. Federal grants

MNsure has received $189.4M in federal Exchange grant funds Grant funds support IT development, planning work, first year operations and more narrowly defined non-IT purposes moving forward MNsure is spending down existing grant funding and federal funding will not be available after CY2016 under current federal policy 2. Premium withhold revenue Collected on plans sold through MNsure 1.5% in 2014 and 3.5% for 2015 Future budget assumes 3.5% in 2016 and beyond 3. Public Program Cost Allocation (to DHS) Health Care Financing Task Force Information: www.mn.gov/dhs/hcftf Contact: [email protected] 62

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